High Court of Punjab and Haryana, Chandigarh
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RK Machine Tools Limited v. Customs, Excise and Gold (Control) Appel - CA-3-2004  RD-P&H 5273 (7 August 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Customs Appeal No.3 of 2004
Date of decision: 25.8.2006
M/s RK Machine Tools Limited
Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi & anr.
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE RAJESH BINDAL
Present: None for the appellant.
Mr. Manjeet Singh Guglani, Central Govt. Counsel for the revenue.
This appeal has been preferred by the assessee proposing following substantial questions of law:- "i) Whether closure of one induction furnace out of two induction furnaces in a unit entitles the assessee for abatement claim when all the conditions as prescribed are fulfilled by the assessee?
ii) Whether the word 'factory' means all the induction furnaces installed in a unit by the assessee or it may means to one or more than one induction furnaces as the case may be?
Iii) Whether the provisions of Rule 96 ZO (3) (2) of the Annual Capacity Determination Rules, 1997 entitles he assessee to abatement claim?
Customs Appeal No.3 of 2004 2
iv) Whether the tribunal was right in rejecting the abatement claim of the assessee by not following the judicial precedence?
v) Whether the tribunal and authorities below can fasten liabilities for which show cause notice is silent and go beyond contents of show cause notice?
vi) Whether the tribunal and authorities below have followed principles of natural justice and if not its effect?"
The assessee is engaged in the manufacture of non-alloy steel ingots/billets by operating two induction furnaces of 3.5 MT and 3 MT capacities. They opted for payment of duty on compounded levy basis.
They sought abatement of duty to the tune of Rs.23 lacs for certain periods during August 1997 to January 1998 on the ground that one of the furnaces remained closed during the said period. The authorities under the Act declined to grant the said relief.
The Tribunal observed that relief of abatement was permissible only when the entire factory was closed and not merely a particular furnace.
The Tribunal followed its earlier decision in M/s Waryam Steels Castings Limited v. CCE, Chandigarh I, 2003 (55) RLT 793.
We need not examine this question further, in view of judgment of the Hon'ble Supreme Court in M/s Channy Enterprises v.
Commissioner of Central Excise ,AIR 2005 Supreme Court 2228, wherein it was observed:-
"6. The respondent's contentions are correct. It is not the appellant's case that the 1998 circular was incorrect.
On the contrary it has been relied on to claim that the ACP should have been determined with reference to the mill which had the the higher capacity alone. The circular in answer to a query which exactly reflects the issue in this case, clearly says that the capacity of the higher of the two mills would be taken for assessing the Customs Appeal No.3 of 2004 3
ACP only if each rolling mill did not have a separate re- heating furnace. If each rolling mill had a separate heating furnace, as the appellant admittedly does, then the capacity of the unit would be the sum total of the capacity of each rolling mill in the unit irrespective of the fact that only one mill operated at a time. The language could not be plainer. What the appellant's argument overlooks is that the scheme did not operate on the basis of the actual production but on the capacity of the rolling mills to produce. We, therefore, see no reason to differ with the view expressed by the Commissioner, CEGAT and the High Court."
In view of the above, no substantial question of law arises.
The appeal is dismissed.
(Adarsh Kumar Goel)
August 25, 2006 (Rajesh Bindal)
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